Laser diodes are advantageously employed in digital optical data communications applications as they have relatively high bandwidth resulting in high data rates. In order to control a laser diode, a modulation reference current and a bias current are applied to a laser driver. The laser driver generates a data signal that drives a laser diode based upon the modulation reference current and the bias current. Typically, the bias current is that which is necessary to maintain a constant “0” power level in the laser diode. The modulation reference current is that which is necessary to maintain a constant “1” power level in the laser diode. In order to transmit data, the laser bias current and the modulation reference current are employed to cause the laser to transmit data using a constant “0” power level and a constant extinction ratio, which is the ratio between the “1” power level and the “0” power level. Unfortunately, the transmission power levels of a laser diode may vary in an undesirable manner over time with changing temperature, age of the laser diode, and due to other factors. As a result, data communication may be hampered over time using laser diodes. Also, the ratio of the power of a logical “1” to a logical “0” degrades over time, thereby reducing receiver margin and possibly increasing bit error rates.